IBM Goes Simple, Sleek With New Net Devices / Products are based on Big Blue's new direction

Henry Norr, Chronicle Staff Writer

Published
4:00 am PST, Tuesday, February 8, 2000

IBM, a company whose name is virtually synonymous with the mainframe and the PC, is hoping that a new focus on sleeker and simpler Internet-access devices will put it back on top in the computer industry.

Big Blue execs have been talking up this new direction -- which they call "EON," or "edge of the network" -- for several months. But yesterday, they previewed some of the new products it will be built around, including stripped-down "Internet appliances" for consumers, improved "thin clients" for corporate desktops and even a "wearable" computer for airline mechanics and others who need access to data while they work.

The new products, which won't be shipped or even formally introduced until later in the year, represent "just the first wave of a very broad set of initiatives across the whole company," said Dave McCaughtry, vice president of marketing, EON and network devices at the IBM Personal Systems Group.

"The PC has been essentially the same for 20 years -- it hasn't changed nearly as much as the Net," he said. "EON is really about what's going to happen post-2000, when the Internet is ubiquitous and broadband (high- speed access) is commonplace."

IBM CEO Louis Gerstner roiled the computer industry a year ago when he declared that "the PC era is over." Some observers suggested that the real problem was simply that IBM's personal-computer division, which has suffered massive losses in recent years, couldn't keep up with its competitors.

Since then, however, virtually every major PC-maker, including such heavyweights as Compaq and Hewlett-Packard, has stepped up efforts to develop new classes of devices that are supposed to offer Internet access without the complexity of a Windows PC. Even softwaremaker Microsoft and chip giant Intel have announced plans to move into this new arena.

Like most of the Internet appliances these competitors have shown, IBM's consists mostly of a notebook-size flat-panel screen and keyboard. Rather than Windows, it will run simpler, cheaper software -- most likely a version of the free Linux operating system, combined with Netscape's open- source browser.

Some models will be designed to plug directly into a high-speed DSL Internet connection; others will have dial-in modems built in.

Like most other "appliance" developers, IBM isn't planning to sell its devices on a retail basis. Instead, it seeks to market them through Internet service providers, telephone companies, Internet portal companies and financial institutions, who in turn would distribute them to their customers.

Instead of paying up front for the device, users would pay for it as part of a monthly service plan. Some providers might subsidize the service for regular customers; if not, prices would likely range from $30 to $60 per month, McCaughtry said.

IBM also intends to extend its simplification pitch to users who want the flexibility of a Windows PC. A new all-in-one PC design code-named Luxor -- essentially a computer integrated into the base of a flat-panel display -- is scheduled to ship in about two months for less than $2,000. Another simplified box, code-named StarDust, will cost less than $600 without monitor.

For the corporate market IBM is beefing up its existing line of NetStation "thin clients" with new models designed to use Linux or to run applications from servers based on Windows 2000, the new business operating system Microsoft plans to release on February 17.

One NetStation model is so small that it can be clipped to the back of an IBM display, creating what the company called a "zero-footprint workstation."

The wearable computer consists of a belt- mounted base unit, a keyboard strapped to the user's wrist, a cursor-control device in the other hand and a small head-mounted display that uses optics to project what looks like a full-size screen.

For more conventional notebooks, IBM will put new emphasis on wireless communications, offering both "Bluetooth" short- range radios and faster wireless-networking cards based on an emerging standard called 802.11.